Bank of England governor Mervyn King has put himself on a collision course with Alistair Darling over the chancellor's plans to nurse the government's finances back to health when recession is over.

Appearing before MPs at the Treasury select committee this afternoon, King rejected the chancellor's budget forecasts, laid out in April, as too unambitious, saying that if the economy recovers as rapidly as Darling expects, the Treasury should act more urgently to bring borrowing down.

"We are confronted with a situation where the scale of deficits is truly extraordinary. This reflects the scale of the global downturn, but it also reflects the fact that we came into this crisis with fiscal policy on a path that wasn't sustainable and a correction was needed," he said.

Under Darling's forecasts, set out in the April budget, it will take until 2013-14 to bring the government's current account deficit – the difference between tax revenue and spending – down to 5.5%. But the governor said Darling should set out proposals that would bring the finances under control over the course of a single parliament.

"There will certainly need to be a plan for the lifetime of the next parliament, contingent on the state of the economy, to show how those deficits will be brought down, if the economy recovers, to reach levels of deficits below those which were shown in the budget figures."

His unusual intervention – breaking the convention that the governor does not comment on fiscal policy – will infuriate Gordon Brown, who has already laid down the battle lines for the next election as between a Labour government that will continue investing in public services, and "Tory cuts". King suggested that instead, any government would be forced to make deep cuts to bring the deficit down.

King made a controversial intervention in the run-up to the spring budget, suggesting that the chancellor had little room for fresh fiscal stimulus; but today's comments are a more direct repudiation of government policy.

Without decisive action, King suggested, the government could struggle to fund its deficits in the years ahead, as financial markets lose confidence. "Although we are finding it easy now to finance those deficits by issuing gilts, there could be problems down the road. We need a credible statement of what will guide the deficit reduction."

Other members of the Bank's monetary policy committee, appearing alongside the governor, said it was likely the economy had hit the bottom, but it was not yet clear how strong a recovery would be. "There is a considerable uncertainty about the strength of the upturn," said Charlie Bean, the Bank's deputy governor.

Kate Barker, one of the committee's independent members, said "the jury is still out" on the issue. There had been some signs of improvement, she said, "but I don't draw the conclusion that we are going to move to a period of strong growth".